Canadian lumber and steel producers warn new markets cannot replace lost exports to US

CALGARY — Canada’s lumber and steel industries are warning that expanding overseas sales cannot make up for losing access to the American market as tariffs threaten mills, jobs and manufacturing output.Industry representatives told the Senate national finance committee that Canada faces significant limits in shifting exports to other countries, Blacklock’s Reporter reported.Derek Nighbor, CEO of the Forest Products Association of Canada, said five Canadian mills have already closed this year. Canadian lumber and wood products sales to the United States total about $14 billion annually.“It’s not a matter of just putting sticks on a boat and sending them somewhere else,” Nighbor testified. “It’s not quite that easy.”While producers see potential in Japan, China, South Korea and the European Union, Nighbor cautioned those markets cannot absorb enough Canadian products to replace American demand.“The diversification opportunity, it’s incremental,” he said. “Not to say it’s not worth doing, but I think we need to be realistic about what the opportunity is.”Building new export markets also takes years, he said, pointing to the industry’s experience in Japan.“It took us about 50 years to build a billion-dollar business in Japan,” said Nighbor.Further growth requires work on building codes, relationships with governments and local businesses, and training builders to use Canadian wood products.John Cuddihy, vice-president of the Canadian Steel Producers Association, delivered a similar warning about his industry’s dependence on American buyers..WATCH: Stelco skipped Ontario tariff aid before Hamilton layoff.“If we cannot ship to the United States a significant portion of our market disappears,” he said.His testimony followed Stelco Holdings Inc.’s announcement of up to 500 layoffs at its Hamilton, Ontario, plant.“Global exports are not a viable option for steel in the context of global excess capacity,” Cuddihy told senators.Quebec Senator Rosa Galvez asked whether alternative markets could compensate for losses caused by the tariff dispute.“There is no silver bullet,” Cuddihy replied.He said global excess steel capacity could reach approximately 721 million tonnes by 2027, dwarfing Canada’s annual steel market of between 12 million and 15 million tonnes.Canadian producers manufacture between 12 million and 13 million tonnes annually, he said. China alone accounts for 108 million tonnes of excess capacity, putting pressure on producers competing for sales around the world.The warnings echo testimony from Canada’s auto industry, which has cautioned that continued tariffs could sharply reduce domestic vehicle production.Brian Kingston, CEO of the Canadian Vehicle Manufacturers’ Association, told the Commons trade committee at a June 9 hearing that Canadian factories depend overwhelmingly on American customers.“There is no Canadian auto industry without the United States,” he said.Of the 1.3 million vehicles manufactured in Canada last year, 1.1 million were shipped to the United States, Kingston told MPs.“If we get to a place where there is no relief for Canada or Mexico in a permanently tariffed North American environment we’ll simply have a smaller industry, perhaps significantly smaller,” he said.“You can’t replace that market, so the production levels will inevitably come down dramatically.”

Canadian lumber and steel producers warn new markets cannot replace lost exports to US

Related Stories

Tim Hortons says 83% foreign worker staffing at Ontario outlet is ‘extremely rare’

The BC NDP leaves one riding without a candidate in an election it called

Petition seeks to bar Ovechkin from Canada over support for Putin

Postmedia ends print editions at six Northern Ontario newspapers despite millions in federal support